Lockheed Martin to partner with Irving Shipbuilding on $185M ship design contract

The federal government has awarded the shipbuilding design contract for the next 15 Canadian warships to Lockheed Martin Canada, with construction set to begin at Halifax's Irving shipyard in 2023.

15 Canadian warships to be built at Halifax shipyard beginning in 2023

Jim Irving, co-CEO of JD Irving Ltd., said Irving Shipbuilding is eager to begin construction of the new warships. This design work is expected to take 3-4 years to complete with construction set to begin in the early 2020s. (CBC)

The announcement was short and sweet Friday morning.

Public Services and Procurement Minister Carla Qualtrough announced the federal government has awarded a $185-million shipbuilding design contract for the next 15 Canadian warships to Lockheed Martin Canada.

This design work is expected to take up to four years to complete. The ships are to be constructed at the Irving shipyard in Halifax, beginning in 2023.

Jim Irving, co-CEO of JD Irving Ltd., said he told the minister in advance to keep the speeches short.

"It's almost 9 o'clock on Friday, and we haven't done a lick of work yet. I know what it costs per minute to pay for this place," he said.

Irving Shipbuilding workers listen to Friday's announcement. (CBC)

"But you're worth it," he told workers who were gathered for the announcement.

"This is much more than a job, it's a commitment."

The Friday morning announcement was a formalization of the long-awaited design contract — the kickoff to a $60-billion project to produce 15 warships to replace the navy's frontline frigates over the next decade and a half.

All of the paperwork for the design contract was signed in Ottawa on Thursday between the Liberal government, Lockheed Martin Canada, BAE Systems, Inc., and Irving Shipbuilding, the prime contractor.

The ships will replace the Halifax-class frigates and the retired Iroquois-class destroyers. (CBC)

The decision to award the contract to the Lockheed Martin-led team is not without controversy, however.

It is the subject of a legal challenge by one of the other companies in the competition — Alion Science and Technology Corporation — and subsidiary Alion Canada.

A third team, led by the Spanish company Navantia, also submitted a bid but has not challenged the decision.

The challenge will be heard in Federal Court and critics question how completely the bids were evaluated.

Neither losing bidder was told precisely what was wrong with their bids, but they can expect to be briefed now that the contract has been signed, say defence industry sources.

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With files from Murray Brewster

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